In some ways, the financial situations of farmers and estate owners are unique because they spend most of their lives investing their earnings back into the farm or estate. But it is always wise to diversify any wealth that has been harvested, and there are a number of financial planning opportunities which can be pursued.

Probably the most important is estate planning, in particular taking into account a person’s likely exposure to Inheritance Tax (IHT). And there is no time like the present for dealing with this, as increasing numbers of people are being drawn into the IHT net.

With IHT running at 40%, it is essential to pursue some of the legal ways available to ensure as much of your estate as possible passes to your chosen beneficiaries and stays away from the grasp of Her Majesty’s Revenue & Customs (HMRC).

In doing so, three decisive steps have to be taken. Firstly, a Will should be drawn up, carefully planned to save the maximum amount of tax. Secondly, assets should be transferred through the shrewd use of gifts. And finally, an IHT-efficient fund needs to be set up to help beneficiaries to meet the tax liability without having to disturb the family wealth built up on the estate or farm.

It may be possible for farmers and landowners to take advantage of Agricultural Property Relief, which can be of exceptional value especially if 100% relief can be obtained, although in most cases the rate of relief is 50%. To be eligible for this, the donor must have either occupied the property for the purpose of agriculture for at least two years before transferring it, or owned it for seven years with others farming it.

There is also assistance available relating to the growing of timber, called Woodlands Relief. This is only available on the value of the timber, with the land on which it is grown likely to benefit from Agricultural Property Relief. This assistance allows the payment of IHT to be deferred until the timber is sold.

All these are important considerations in retirement and estate planning for farmers and landowners. So are Asset Preservation Trusts, which can protect death benefits from IHT on the death of a surviving spouse. They can also make sure death benefits are not assessed as capital of the surviving spouse if he or she needs long term care, and can guarantee that death benefits go to the children rather than a spouse’s new husband or wife if he or she remarries.

While on the subject of long term care, this is another area that needs early attention. Estate owners and farmers are no different from other people – many of us are now living longer, and therefore more people than ever before will require nursing or residential care in their later years, a prospect that is causing increasing concern.

Most people are largely unfamiliar with the costs and issues involved. But under current local authority means tests, those with assets of more than £23,250 (2010/11) are given no help at all with care costs. And with figures showing that it costs more to keep someone in an average care home for a year than the annual fees to send a child to Eton, planning for long term care is essential (Source: Telegraph 4/4/10).

Without expert help and guidance, capital built up in the estate or farm over many years can be completely eroded by care home fees. Thousands of people are living in care homes, having had to sell their homes, land or estates to fund the necessary costs. Planning for long term care is mutually compatible with lessening IHT exposure.

As with all elements of wealth management, preparing for long term care all comes down to early planning. The same applies with retirement. The decisions landowners and farmers make today dictate the standard of living they will enjoy tomorrow, and the earlier they start planning for retirement, the easier it is to create the desired lifestyle for those precious later years. And while pensions are still the best option for funding retirement, they are not the only factor when working out future financial needs.

For example, Individual Savings Accounts (ISAs) represent the most tax-efficient way to save and invest for the future, other than pensions. They are easily accessible, withdrawals are paid with no tax liability, they are a useful short or medium term account for cash, and offer an easy route to the equity markets. However it should be noted the favourable tax treatment given to ISAs cannot be guaranteed as it is subject to changes in legislation.

They are not the only tax-efficient savings vehicles - others include VCTs (Venture Capital Trusts) and EISs (Enterprise Investment Schemes). Although high risk, these exciting investment opportunities can offer significant tax benefits, such as Income Tax relief, tax free growth, deferral of Capital Gains Tax (CGT) and tax relief when funding for retirement and Inheritance Tax mitigation after two years.

Other wealth management issues landowners and farmers need to consider is succession planning and protection of the business. It is important to make sure assets are handled in tax efficient ways to allow estates to be protected for future generations.

Farmers and estate owners are key people in their businesses, responsible for making them work successfully and creating the wealth. Without them at the helm, a lifetime’s work could be lost if not properly protected. Key person protection plans can provide death and disability protection, while critical illness plans cover against a whole range of serious medical conditions.

Then there is the question of sale or succession of the farm or estate. All business owners should have exit strategy plans, allowing them to leave in the most efficient way possible and with the maximum cash in hand after taxation. Whether you sell your business or not, having a plan in place gives confidence to your colleagues and family, as well as your bank.

Advice from a wealth management specialist can help owners and farmers meet their financial goals while allowing them to concentrate on managing the business. The role of a professional advisor is to help with financial planning and provide a better understanding of the various tax-efficient opportunities available to help preserve accumulated wealth.